Exploring the realities of renting in retirement

Jun 05, 2023
Renting in retirement can provide you with both lifestyle and financial advantages. Source: Getty Images.

As retirement approaches, many individuals find themselves at a crossroads, contemplating the next chapter of their lives and the decisions that will shape it. For some, the prospect of homeownership remains a distant dream, hindered by soaring prices and an ongoing housing and rental crisis. However, amidst the challenges, an increasing number of retirees are embracing the realities of renting, uncovering unexpected benefits that extend beyond the financial realm.

Renting in retirement offers a unique sense of freedom and flexibility from the burdens that can come with homeownership, while also presenting certain financial advantages.

While the current rental crisis may paint a bleak picture for renters there are still a whole host of reasons why retirees may want or need to rent their home in retirement.

Forever renters

For starters, while many people aspire to property ownership and some would say that Australians are property obsessed, there is a significant cohort of Australians — approximately 31 per cent — who are renters. As you might expect, that number is heavily skewed towards the under 35 age group, and there are variations across the different states and territories but for people aged 55 to 64 years, there are around 19.1 per cent who are renting their current home. For some of these people, it will be an investment decision, putting the money that would have spent on a mortgage into shares or other investments, but for many, it will be because they simply cannot afford to buy a home in that location. It is probably safe to assume that for the majority of these people they will either need to or choose to continue to rent in their retirement years.

Grey Nomads

Some people’s idea of retirement is to cut off the shackles of the family home and travel or spend some of the year where it is warmer to avoid the depths of winter, particularly in the southern states or to be close to family or friends for an extended period. For these people, renting gives them the flexibility to move as their needs, or the weather, change.

By opting for the flexibility of renting, you unlock a number of possibilities to seamlessly adjust your living arrangements as needs and travel desires evolve. This choice affords you the freedom to navigate life’s journey on your own terms, constantly adapting your surroundings to create the retirement of your dreams.


Despite the ongoing housing crisis, renting can more often than not be a more affordable option than paying a mortgage and other expenses associated with homeownership. Renting obviously saves on the costs associated with loan repayments, it can also save on other costs associated with homeownership such as rates, building insurance, renovations, and maintenance costs. Renting can also provide you with a greater choice of location, particularly if you are looking at moving to an area where property prices are high.

Renting in a retirement community

In addition to the private rental market, you have the option of renting in a retirement community. In some cases every home, unit or apartment will be offered on a rental basis, in other cases there will be homes, units or apartments for rent within a village that also offers freehold, leasehold or licence arrangements. Of course, the benefit of renting in one of these communities is that you get the use of all of the facilities which can include a community centre, swimming pool, bowling greens, tennis courts, cinema, and barbecue facilities to name a few as well as the company of people looking to share a similar lifestyle and the safety and security that comes with living in a village. It is not uncommon for rental arrangements within a retirement community to be set based on a percentage of the age pension plus rent assistance as providers know that many retirees will be relying on this for the majority of their income.

Pension and rent assistance

Releasing some equity, paying off debts and having the flexibility (and potential cost savings) that comes with renting may be a good plan if you receive the Age Pension. However, it is important to understand the impact of this decision on your pension entitlement and other benefits.

As a single non-homeowner, the amount of assets you can have (called the asset threshold) before your pension payments are reduced is $504,500 and for a couple, it is $643,500. Your assets include your investments, caravans, cars, boats, furniture, artwork etc.

Rent assistance is paid in addition to the age pension for people who rent their home and pay more than a minimum amount of rent. To be eligible to claim rent assistance you will need to be paying at least $140.40 per fortnight in rent if you are single or $227.40 per fortnight as a couple. Each dollar of rent in excess of the threshold attracts rent assistance at 75c per dollar. The maximum amount of rent assistance you can claim as a single person is $157.20 per fortnight and for a couple, it is $ 148.00 per fortnight (combined).

Renting in retirement can offer you both lifestyle and financial advantages. By opting to rent, you can enjoy the flexibility to adapt your living arrangements as your needs change, whether it’s exploring new locations, staying close to loved ones, or embracing new adventures.

Moreover, renting eliminates the financial burdens and responsibilities of homeownership, providing predictable monthly expenses, reducing maintenance costs, and offering the potential for downsizing. This financial freedom allows you to redirect your resources towards experiences, travel, and pursuing your passions, while also providing the flexibility to relocate without the constraints of property ownership.

Ultimately, renting can present you with an opportunity to curate a fulfilling retirement lifestyle that is both financially sustainable and aligned with your changing aspirations.

This article was originally published on May 3, 2020, and has been updated on June 5, 2023.

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.



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